Starting an internet business can be a fun way to make money while working at home. Before you can enjoy the pleasures of working in your pajamas and slippers, though, you'll need to file some paperwork to make everything legal. Acquiring a business license and preparing all your required tax forms probably doesn't seem like much fun, but don't fret. With this guide and a little bit of focus, you can get it all prepared in less than a day.
Depending on what your business is and what state you live in, you may need several different business licenses. If your business carries any name other than your own, you'll need to file a Doing Business As license before you can open a bank account, write checks, or cash or deposit checks on behalf of the business. Your state may also require you to have a tax and resale license, so contact your local Small Business Association to inquire about state specific licenses.
- 1099-MISC: If you employ other people on a freelance (pay per job) basis which pays any individual freelancer more than 600 dollars a year, you'll need a 1099-MISC form to report your freelancers' income. If your business consists of only yourself and your clients, though, don't worry about this one.
- IRS Form 1040: You probably know about this one if you've ever filed taxes before; it's the basic form which everyone who pays taxes has to fill out. However, there are 2 additional attachments you'll need to fill out that you may not have noticed before. The Schedule C is the section which all sole proprietors need to fill out. The Schedule SE is the other part which relates to self employment, and is where all the calculations of the numbers filled in on the Schedule C are carried out. Both of these sections must be completed if you run a home business and earn income from it.
The tax forms may be inconvenient, but there really aren't that many of them, and they're only once a year. Make sure you're well organized and keep a record of all your expenses and income related to the business, including all the monies paid to freelancers, and it will be much easier to complete your taxes come April.
Where to Find Forms
Once you've contacted your local Small Business Association to figure out what business licenses you need, you should be able to pick up the appropriate forms at their office, have them mailed to you, or possibly even print them out online through your state business website. You don't need to worry about your tax forms right away, but they are also easily available online.
When you've acquired whatever forms you need, it shouldn't be too difficult or time consuming to fill them out and send them in. After that, you're good to go - so find your comfiest pair of pajamas, grab a cup of coffee, and enjoy working from home with your internet business.